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Early Tech Adopters Secure Competitive Advantage

Early Tech Adopters Secure Competitive Advantage

Tuesday, August 3, 2021

While the digital transformation was underway prior to the pandemic, the last 18 months have accelerated the need for technology-enabled processes across all industries.

One thing is clear, early adopters will secure their competitive advantage. As economies unlock and government intervention is reduced, the appetite for business borrowing will increase, making lenders more susceptible to increased fraud. The key to mitigating risk is good technology that can improve internal processes and decision making.

A Single Source Of Truth

Companies need to unlock working capital for growth. Receivables finance is one way to do this and a useful vehicle to support economic recovery.

Aided with the right risk management and due diligence tools, lenders can:

  • build a detailed credit history of their customers and new prospects;
  • flag any adverse trends and;
  • identify any indicators of fraud.

Using data extraction methods, lenders can:

  • assess new prospects;
  • speed up onboarding and;
  • strengthen continuous in life-monitoring.
MICHAEL Michael Ellis Managing Director, EQ Riskfactor

By establishing digital credit logic, lenders can collate data from different sources. They can present to team members from different departments, sites and borders with this single source of truth. Prices can then be set appropriately and decisions are informed.

“The key point is that the user within the lender organisation should have the specific data they need to make effective decisions, but without being confronted with information overload,” says Michael Ellis, Managing Director, EQ Riskfactor.

“The beauty of automated data processes is they provide the right information to the right teams at the right time.”

The Growing Trend Towards Data Extraction

Huge opportunities are emerging in real-time data extraction; where a lender can extract accounting or banking data directly from their customers’ IT systems. This is rather than the more traditional ‘push’ system where clients manually send through the information.

The most important factor for both lenders and customers is that the security of information should be intact. That said, at EQ Riskfactor we certainly see data extraction as a growing trend moving forward – particularly in a scenario where a lender becomes concerned over a customer’s business viability or potential to conduct fraudulent activity.

— Michael Ellis Managing Director, EQ Riskfactor

Data extraction needs to happen within a proven and well-considered strategy. While customers are willing to share their data, they will only do so in return for perceived value – for example through substantial time or cost savings, or efficiency and accuracy gains. We help lenders with both technology and adoption strategies to ensure they maximise value.

The Way Forward

Close collaboration between the lender’s senior stakeholders and system providers helps produce the best results.

Coming out of the pandemic, there is no doubt that investing in technology will be the driving force in building the business resilience of lenders. By investing, they will be able to move forward, reducing the chance of errors and oversight, enhance due diligence, speed up onboarding, and mitigate risk exposure.

Technology is fundamentally transforming the possibilities of receivables finance and how lenders operate. Close collaboration between the lender’s senior stakeholders and system providers helps produce the best results. It strikes a balance between standardised best practice and bespoke lender needs. It will be the lenders who invest in technology now who will secure future growth beyond the end of this pandemic.

More about the report

Volume 2 of the EQ Riskfactor Receivables Finance Global Outlook report, Technology – The Route To Resilience is out now.

It provides fascinating insights around sustaining future growth in the post-COVID recovery. Each volume of the report will explore different aspects of the study, revisiting views, opinions and analysis.

Read the full report here